The recent decline of pension funds assets, which has been caused by the COVID-19 crisis, makes for a reform of Switzerland’s occupational pensions even more urgent, the managing director of the employers association Schweizerische Arbeitgeberverband, Roland Müller, told IPE.
The Swiss Employers’ Association expects the Federal Council to submit its message to parliament as soon as its operations resume back to normal, he said.(…)
“The extension of the deadline will not affect our position,” he said, adding that social partner compromise has broad support from the association’s members.
For Sergio Bortolin, managing director of Aska Pensionskasse, an occupational pensions reform is inevitable due to demographic developments, the ongoing low interest rate environment, and other social changes.
“The redistribution from actively insured persons to pensioners must be reduced to an acceptable level,” he added.
For Carl Hollitscher, head of institutional sales for Austria and Switzerland at Franklin Templeton, the reform is necessary. “The financial stability of the pension sector is under pressure mainly due to a low rate environment and a rising life expectancy rate,” he said.
He agrees that the extension is just a reaction to the COVID-19 pandemic and should have no impact. The reform is a step in the right direction, he said.
“The lowering of the conversion rate is the right thing to do, but the step down could have been bolder. On the other hand, the payments to compensate for the shortfall in specific pensions are too generous,” he continued. He claimed that such payments “should have been focused solely on people affected by the reform and potentially in need”.
He added that the lack of a mechanism that ties pension benefits dynamically to a population’s life expectancy is an important point that is missing in the current reform.
The employers’ association is certain that parliament ultimately will adopt the reform. “The compromise is not a bureaucratic monster, it can be passed by the parliament immediately and introduced promptly,” Müller said, adding that in the past no reform has made its way through parliament without the backing of social partners.